INDIANAPOLIS & SAN FRANCISCO—Eli Lilly and Co. and Nektar Therapeutics have announced a strategic collaboration to co-develop NKTR-358, Nektar’s novel immunological therapy showing potential to treat a number of autoimmune and other chronic inflammatory conditions.

Nektar specializes in developing treatments for cancer, autoimmune diseases and chronic pain, while Eli Lilly currently focuses on therapeutic areas of immunology, diabetes, oncology and neurodegeneration. Through the partnership, Lilly and Nektar will co-develop NKTR-358, with Nektar responsible for completing Phase 1 clinical development.

Under the terms of the agreement, Nektar will receive $150 million upfront and be eligible for up to $250 million in additional development and regulatory milestones. The parties will share Phase 2 development costs, 75 percent Lilly/25 percent Nektar. Nektar will have the option to participate in Phase 3 development on an indication-by-indication basis.

NKTR-358 is a potential first-in-class resolution therapeutic with potential to address an underlying immune system imbalance in patients with many autoimmune conditions. It targets the interleukin (IL-2) receptor complex in the body in order to stimulate proliferation of powerful inhibitory immune cells known as regulatory T cells. By activating these cells, NKTR-358 may act to bring the immune system back into balance.

“We look forward to working with Nektar to study this novel approach to treating a number of autoimmune conditions,” said Dr. Thomas F. Bumol, senior vice president of biotechnology and immunology research at Lilly. “NKTR-358 is an exciting addition to our immunology portfolio and reinforces Lilly’s commitment to sustain a flow of innovative medicines in our pipeline.”

According to Nektar, autoimmune disease affects more than 23 million Americans—nearly 8 percent of the U.S. population—and the prevalence is continuing to rise. There are more than 80 known types of autoimmune diseases, including lupus, Crohn’s disease, psoriasis and rheumatoid arthritis. Autoimmune diseases cause the immune system to mistakenly attack healthy cells in a person’s body. Current systemic treatments for autoimmune disease, including corticosteroids and anti-TNF agents, suppress the immune system broadly and come with severe side effects.

IL-2 and its receptors have roles in key functions of the immune system, tolerance and immunity, primarily via their direct effects on T cells. In the thymus, where T cells mature, they prevent autoimmune diseases by promoting the differentiation of certain immature T cells into regulatory T cells, which kill off other T cells that are primed to attack normal healthy cells in the body. IL-2 also promotes the differentiation of T cells into effector T cells and into memory T cells when the initial T cells are also stimulated by an antigen, thus helping the body fight off infections. Nektar and Lilly hope that NKTR-358 will specifically target the IL-2 reception complex and ideally offer a profound clinical impact and healthy organ function in autoimmune conditions without the deleterious effects of existing treatment modalities.

NKTR-358 is being developed as a once- or twice-monthly self-administered injection for a number of autoimmune diseases. In March of 2017, Nektar began the first Phase 1 dose-finding trial of NKTR-358 to evaluate single-ascending doses of NKTR-358 in approximately 50 healthy subjects, measuring observed changes and functional activity of regulatory T cells. The objective of the trial is to establish a range of dose levels that could be advanced in further clinical trials. The Phase 1 study will also evaluate pharmacokinetics and safety. Preclinical data on NKTR-358 demonstrates that treatment with NKTR-358 induces profound regulatory T cell effects and suppresses inflammation in multiple models. Nektar plans to start a multiple-ascending dose Phase 1 trial around the end of 2017. The second Phase 1 trial will evaluate NKTR-358 in patients with an autoimmune condition (such as psoriasis or systemic lupus erythematosus).

“We are very pleased to enter into this collaboration with Lilly as they have strong expertise in immunology and a successful track record in bringing novel therapies to market,” said Howard W. Robin, Nektar’s president and CEO. “Importantly, this agreement enables the broad development of NKTR-358 in multiple autoimmune conditions in order to achieve its full potential as a first-in-class resolution therapeutic.”